Product costs in a complex organization are likely to be distorted if a traditional volume-based cost...
Product costs in a complex organization are likely to be distorted if a traditional volume-based cost driver is used and
Select one:
a. manufacturing overhead costs are a significant percentage of total production costs.
b. raw materials costs are a significant percentage of total production costs.
c. direct labor costs are a significant percentage of total production costs.
d. direct costs are a significant percentage of total production costs.
Homework Answers
Solution:
Product costs in a complex organization are likely to be distorted if a traditional volume-based cost driver is used and "manufacturing overhead costs are a significant percentage of total production costs."
Hence option a is correct.
Add Answer to:
Product costs in a complex organization are likely to be
distorted if a traditional volume-based cost...
Sherwin Williams uses traditional volume based costing to determine its product costs. This is the method...
Sherwin Williams uses traditional volume based costing to determine its product costs. This is the method we learned in chapter 3 Job Order Costing. Currently, Sherwin Williams allocates overhead based on direct labor hours. The company estimated 10,000 direct labor hours and total overhead of $1,970,000 for the year. They have determined the following activity cost pools for overhead cost. Overhead Activities Machine setup $950,000 Material handling $820,000 Machine operation $200,000 Total $1,970,000 Note: Activity cost pools aren’t necessary for...
Harwell, Inc. produces two different products, Product A and Product B. Harwell uses a traditional volume-based...
Harwell, Inc. produces two different products, Product A and Product B. Harwell uses a traditional volume-based costing system in which direct labor hours are the allocation base. Harwell is considering switching to an ABC system by splitting its manufacturing overhead cost of $850,000 across three activities: Setup, Production, and Finishing. Under the traditional volume-based costing system, the predetermined overhead rate is $8.50/direct labor hour. Under the ABC system, the rate for each activity and usage of the activity drivers are...
Carter, Inc. produces two different products, Product A and Product B. Carter uses a traditional volume-based...
Carter, Inc. produces two different products, Product A and Product B. Carter uses a traditional volume-based costing system in which direct labor hours are the allocation base. Carter is considering switching to an ABC system by splitting its manufacturing overhead cost of $783,000 across three activities: Design, Production, and Inspection. Under the traditional volume-based costing system, the predetermined overhead rate is $2.61/direct labor hour. Under the ABC system, the rate for each activity and usage of the activity drivers are...
Harwell, Inc. produces two different products, Product A and Product B. Harwell uses a traditional volume-based...
Harwell, Inc. produces two different products, Product A and Product B. Harwell uses a traditional volume-based costing system in which direct labor hours are the allocation base. Harwell is considering switching to an ABC system by splitting its manufacturing overhead cost of $750,000 across three activities: Setup, Production, and Finishing. Under the traditional volume-based costing system, the predetermined overhead rate is $7.50/direct labor hour. Under the ABC system, the rate for each activity and usage of the activity drivers are...
Rogen Corporation manufactures a single product. The standard cost per unit of product is shown b...
Rogen Corporation manufactures a single product. The standard
cost per unit of product is shown below.
Direct materials—3 pound plastic at $6.00 per pound
$ 18.00
Direct labor—1.5 hours at $11.00 per hour
16.50
Variable manufacturing overhead
10.50
Fixed manufacturing overhead
7.50
Total standard cost per unit
$52.50
The predetermined manufacturing overhead rate is $12 per direct
labor hour ($18.00 ÷ 1.5). It was computed from a master
manufacturing overhead budget based on normal production of 7,800
direct labor hours...
Prepare a quantitative comparison of the traditional and activity-based cost assignments. All numbers currently in the...
Prepare a quantitative comparison of the traditional and
activity-based cost assignments.
All numbers currently in the table are correct.
Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Selling price per unit Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production and sales Xtreme $ 125.00 $ 64.20 $ 16.00 1.6 DLHS 25,000 units Pathfinder $ 91.00 $ 55.00 $ 10.00 1.0...
Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below....
Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials—1 pound plastic at $7.00 per pound $ 7.00 Direct labor—1.6 hours at $12.00 per hour 19.20 Variable manufacturing overhead 12.00 Fixed manufacturing overhead 4.00 Total standard cost per unit $42.20 The predetermined manufacturing overhead rate is $10 per direct labor hour ($16.00 ÷ 1.6). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours...
Problem 7-17 Comparing Traditional and Activity-Based Product Margins (L07-1, LO7-3, LO7-4, LO7-5) Smoky Mountain Corporation makes...
Problem 7-17 Comparing Traditional and Activity-Based Product Margins (L07-1, LO7-3, LO7-4, LO7-5) Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Selling price per unit Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production and sales Xtreme $ 125.00 $ 64.20 $ 16.00 1.6 DLHS 25,000 units Pathfinder $ 91.00 $ 55.00 $ 10.00 1.0 DLHS 71,000 units The company has a...
Problem 23- Rogen Corporation manufactures a single product. The standard cost er unit of product is...
Problem 23- Rogen Corporation manufactures a single product. The standard cost er unit of product is shown below Direct materiai-1 pound plastic at $5.00 per pound $6.00 Direct labor0.5 hours $11.00 per hour Variable manufacturing overhead 2.75 Fixed manufacturing overhead Total standard cost per unit $16.50 The predetermined manufacturing overhead rate is $10 per direct labor hour($5.00 -0.5). It was computed from a master manufacturing overhead budget based on normal production of 2.500 direct labor hours 15,000 units) for the...
Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below....
Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials—3 pound plastic at $7.00 per pound $ 21.00 Direct labor—1.0 hours at $12.00 per hour 12.00 Variable manufacturing overhead 7.00 Fixed manufacturing overhead 7.00 Total standard cost per unit $47.00 The predetermined manufacturing overhead rate is $14 per direct labor hour ($14.00 ÷ 1.0). It was computed from a master manufacturing overhead budget based on normal production of 5,400 direct labor hours...
Rogen Corporation manufactures a single product. The standard
cost per unit of product is shown below.
Direct materials—3 pound plastic at $6.00 per pound
$ 18.00
Direct labor—1.5 hours at $11.00 per hour
16.50
Variable manufacturing overhead
10.50
Fixed manufacturing overhead
7.50
Total standard cost per unit
$52.50
The predetermined manufacturing overhead rate is $12 per direct
labor hour ($18.00 ÷ 1.5). It was computed from a master
manufacturing overhead budget based on normal production of 7,800
direct labor hours...
Prepare a quantitative comparison of the traditional and
activity-based cost assignments.
All numbers currently in the table are correct.
Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Selling price per unit Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production and sales Xtreme $ 125.00 $ 64.20 $ 16.00 1.6 DLHS 25,000 units Pathfinder $ 91.00 $ 55.00 $ 10.00 1.0...
Problem 7-17 Comparing Traditional and Activity-Based Product Margins (L07-1, LO7-3, LO7-4, LO7-5) Smoky Mountain Corporation makes two types of hiking boots-the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Selling price per unit Direct materials per unit Direct labor per unit Direct labor-hours per unit Estimated annual production and sales Xtreme $ 125.00 $ 64.20 $ 16.00 1.6 DLHS 25,000 units Pathfinder $ 91.00 $ 55.00 $ 10.00 1.0 DLHS 71,000 units The company has a...
Problem 23- Rogen Corporation manufactures a single product. The standard cost er unit of product is shown below Direct materiai-1 pound plastic at $5.00 per pound $6.00 Direct labor0.5 hours $11.00 per hour Variable manufacturing overhead 2.75 Fixed manufacturing overhead Total standard cost per unit $16.50 The predetermined manufacturing overhead rate is $10 per direct labor hour($5.00 -0.5). It was computed from a master manufacturing overhead budget based on normal production of 2.500 direct labor hours 15,000 units) for the...
Most questions answered within 3 hours.
-
1. An experiment was run where varying amounts of HClO and KClO
solutions were mixed and...
asked 3 minutes ago -
This is symbolized by a circle over a single line in an entity
relationship diagram. It...
asked 5 minutes ago -
National well-being can be measured using the Per-capita GDP
(per-capita) and the Human Development Index (HDI)....
asked 7 minutes ago -
A failure of an engine control unit causes it to fail an average
of 0.1 times...
asked 20 minutes ago -
A siren on an emergency car moving with velocity 90 km/hour
produces the sound with frequency...
asked 20 minutes ago -
Consider the schema below that models a bank’s branches,
customers and their accounts and loans. Provide...
asked 27 minutes ago -
What kinds of policies should be considered when individuals
decisions may likely impact public expense? For...
asked 36 minutes ago -
The financial statements of Apple Inc. show the following
numbers for fiscal year 2017 ($000,000):
Revenue...
asked 41 minutes ago -
Suppose that you are given the following results. Find the
correlation coefficient of the data.
sx...
asked 50 minutes ago -
The width of a tool used for semiconductor manufacturing
is assumed to be normally distributed with...
asked 52 minutes ago -
A
runaway train car that has a mass of 1,400 kg travels at a speed of...
asked 56 minutes ago -
The expected abnormal earnings of a firm that has earnings of
$40,000 with a required equity...
asked 55 minutes ago